Projections Go Haywire

The changing market requirements for exports of formulations has compelled Eupharma to re-work its beta-lactum formulations project. Accordingly, the project that was scheduled to go on stream during early 1995-96, is expected to be completed some time in 1997-98. Eupharmas shares issued at a premium of Rs 90 per share in March 1995, are currently traded at Rs 37 on the Bombay Stock Exchange. With the delay in the projects, the companys projection for the year ending March 1997 is likely to go haywire. During the six months ended September 1996, the company has reported sales turnover of 39.37 crore and net profit of Rs 4.48 crore. Against this, the company has projected sales turnover of Rs 108.98 crore and net profit of Rs 11.05 crore. The delayed project would result in delayed gains for the company. However, it is positive of reaching the projected sales and profits from existing capacities.

Market price: Rs 37, EPS: Rs 13.65, P/E: 2.7